The dollar extended its winning streak on Tuesday, lifted by the expectation that the Fed will give insight into when it may begin tightening its monetary policy. Investors’ expectations that the Fed will hike interest rates four times this year, along with geopolitical tensions between the Ukraine and Russia fuelled the dollar’s rally on the day as investors looked to the haven for safety. The dollar touched a high of 96.272 before ending the session at 95.948.
The euro was on the losing end once again during yesterday’s trading session. The shared currency slipped at the start of the New York session to graze a low of $1.1261 as investors chose the dollar as their haven currency of choice. The euro slightly retraced some of its losses intraday but ultimately consolidated on the downside to close the session at $1.1299 as the Russia – Ukraine tensions remain high.
The pound staged a slight recovery on Tuesday, pausing its previous sessions losing momentum on the day. The pound traded mostly under pressure throughout the session but managed to post some gains despite a stronger dollar to touch a high of $1.3518 before ending the day marginally firmer at $1.3496.
The South African rand weakened further in its early activities on Tuesday, as risk dominated global markets, on the back of concern over geopolitical tensions. Although the local unit was seen putting up a good fight in its late trades, clawing back all earlier losses to end the session flat. Positioning ahead of the Fed’s meeting today and the SARB’s meeting tomorrow, with both central banks expected to hike rates to curb inflation also contributed massively to the rand’s moves on the day. After weakening to a high of R15.3650/$, the rand consolidated to end the day flat at R15.2450/$.
Locally, we have nothing on the data cards, and internationally we have the Fed’s policy meeting. The local unit will continue to track geopolitical tensions, along with the outcome from the Fed’s meeting.
Expected ranges for the day:
- USDZAR: R15.1500/$ – R15.3000/$
- EURUSD: $ 1.1280 – $1.1320
- GBPUSD: $ 1.3475 – $1.3525